International Exchange of Information Manual

Notification requirement: Penalties for failure to send notification: When will a penalty apply?

Notification Regulations: Penalties for not sending a notification: When will a penalty apply?

Any penalty will be charged under Regulation 13 of The International Tax Compliance Regulations 2015 (SI 2015/878), as amended by the International Tax (Client Notification) Regulations 2016.

A Specified Financial Institution or Specified Relevant Person who fails to notify their specified clients will be charged a penalty of £3,000. The notification must be sent by 31 August 2017, so if this deadline is not met the penalty will be due. This is a flat rate penalty, and not charged per client not notified.

When applying either of the general approaches, there is a chance that the sender will notify some people who do not meet the criteria. It is unlikely a penalty will be due, provided the sender has taken reasonable steps to get it right.

If the person satisfies HMRC that there is a reasonable excuse for the failure they will not be charged the penalty. Having insufficient funds or having relied on another person are not reasonable excuses.

The assessment of the penalty must be made by HMRC by notification to the person within a period of 12 months from 1 September 2017.